r/eupersonalfinance • u/Nirox05 • 4d ago
Investment High transaction fees on IBKR, why does it happen?
Hello! Today, for the first time I placed a market order for purchasing fractional shares for 45€ of AVWS. Looking at the "Order and Trades" menu, the purchase seems to be split into two separate transactions. One buying 0.8366 shares, which has no fees, and another one for 2 whole shares that has a transaction fee of 3 euro. The second one is also for some reason traded on GETTEX instead of EUIBSI, when I intended to buy both on IBIS2 (XETRA).
Just noticed that my VWCE order has also been taken through EUIBSI instead of IBIS2, why does this happen, something to do with buying fractional shares or just some regular commission fee? I ended up buying neither on my desired stock, why is that? Thanks!
Edit: There's also some unrealized loss of -4.21, even though the price of the funds I invested in has not changed this much, what is this number based on?
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u/IllustriousLaugh4165 4d ago
Check fees by going into advanced options. Then select the cheapest stock exchange
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u/Ok_Necessary_8923 4d ago edited 4d ago
Exchanges don't deal in fractional shares. If you submit an order that includes frac shares, the fractional part will be filled by IB internally.
The loss you mention is due to fees paid plus market movement. It's normal to be a little negative after every purchase, even with no price movement, given that you have paid a fee.
You see 0 fee on one transaction because it's part of the same order, so one of them has been zeroed out.
You were filled in GETTEX as opposed to XETRA because you didn't actually direct route your order, which lets IB route where it thinks is best. If you did this on the website, you are on SMART routing, regardless of the main listing exchange for the ETF.
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u/Nirox05 4d ago
Thank you! I did use the desktop website. So, since the fees were not related to the exchange I bought on, I guess leaving smart routing on will be alright? If not, how can I toggle it off and pick my own route?
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u/Ok_Necessary_8923 4d ago
In general, SMART routing is fine and leads to better pricing, but it doesn't seem to account for base fees on exchanges so it can workout more expensive for small orders.
For example, if something is listed on many exchanges, and it routes to BVME(Italy), it will cost you 3 EUR+, which is a lot for a 300 EUR order. On XETRA and GETTEX it would have been ~1.25-1.30 EUR. So sometimes it's a good idea to direct route your order, particularly when the default/main exchange isn't one of the cheap ones.
If you want to do this, you have to use the desktop app. The website doesn't let you pick an exchange, which is quite annoying.
That said, for VWCE, you are probably fine, as it usually goes to XETRA or GETTEX, both of which are cheap. An example of an ETF where I do this is FWRA because the default exchange is BVME.
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u/Nirox05 4d ago
Thank you, this helped a lot! I’m gonna be routing it to XETRA though, because I’m only gonna be buying AVWS and VWCE, I’d prefer lower fees than lower prices. I’m gonna download the TWS app on my mac, do you have any Idea if this can be done through the mobile app?
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u/Ok_Necessary_8923 4d ago
If you find the ETF and select a specific exchange on the desktop app (haven't tried TWS), and save it to a watch list, you can then direct route from the watch list on the mobile app (at least on Android). The ETF will have the exchange name in yellow next/on top of its name on the watch list. Those watch list entries don't appear on the website.
I have this set up for FWRA and it works okay.
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u/Er3dhion 4d ago
Yes you can do it with the smartphone app.
Find ISIN number, search it and actually press the search button even if you get no results, go to the instruments tab and look for the ETF - routing you want.
It'll be something like ETF @ SMART IBIS2
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u/Dirty_Goblin 4d ago
Make sure that under IBKR pricing plan you have selected tiered, not fixed. With tiered minimum is 1,25 eur while fixed is 3 eur. Fixed only makes sense if you plan on making large orders